This is a rush transcript from "Special Report," April 24, 2014. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: It has basically taken not a small step backward, a giant leap backward and embraced one of the preeminent terrorist organizations of our time, committed to the annihilation of the Jewish state, committed in its charter to the murder of Jews wherever they are. This is the partner that he chose. And obviously he has to choose, either peace with Israel or a pact with Hamas. You can't have both. He chose Hamas. So unless he -- unless President Abbas changes his decision on a pact with Hamas, he's effectively killed the peace process.

ISMAIL HANIYEH, HAMAS PRIME MINISTER: The Israeli position was expected. This is occupation, and absolutely they do not want the Palestinian people to be united and want the division to continue.

(END VIDEO CLIP)

BRET BAIER, ANCHOR: Fatah, the Palestinians with a unity move in accord with Hamas, and that as you heard from the Israeli prime minister earlier on this show has killed the peace process, at least for now. That's where we'll start on our foreign policy. Let's bring in our panel, Judge Andrew Napolitano, Fox News senior judicial analyst, Charles Lane, opinion writer for the Washington Post, and syndicated columnist Charles Krauthammer, who also happens to be the author of the bestselling book "Things that Matter," in case you forgot.

KRAUTHAMMER: Well, it never had a chance in the first place. And what we learned in the interview is precisely why. It's a lesson we have to learn, relearn, over learn every single time. And the reason is quite simple. The Palestinians, the moderate Palestinians, the Fatah Palestinians, Abbas, have shown again and again that in the end when it comes to making the final deal to get a peace with Israel, they are not interested. As happened at Camp David in 2000, in 2001 in Taba, in 2008, it's happened again now. They will do interim deals, they will do temporary deals.

But here they were confronted with an Israel prepared to create a Palestinian state, divide Jerusalem, and withdraw every Israeli who lives in the settlement on Palestinian territory. The answer is always no. And the reason is this -- they will not accept a Jewish state in their midst. And as Netanyahu said, Abbas repeated that again. They will not recognize a Jewish state. And once you make a pact with Hamas, which is openly dedicated, proudly dedicated to destroying Israel and to actually attacking Jews all over the world, that's actually in their charter, you have announced you're not interested in peace.

Israel cannot possibly conclude in peace with a Palestinian government, half of whom is constructed of, consisted of people who want to destroy Israel. That's where we are, where we are. This is the same lesson, again, unfortunately.

BAIER: Chuck, State Department Spokesperson Jen Psaki really put the onus on both sides. Take a listen.

(BEGIN VIDEO CLIP)

JENNIFER PSAKI, STATE DEPARTMENT SPOKESPERSON: There have been unhelpful steps from both sides throughout this process, whether it's settlements, or the U.N., or whatever it may be. So they are both -- they have both been guilty of that. But, yes, there are many mechanisms for moving the process forward, but it's ultimately up to the parties.

(END VIDEO CLIP)

BAIER: That didn't sound too encouraging, in other words.

CHARLES LANE, EDITORIAL WRITER, WASHINGTON POST: Well, look, she made an illusion there to the U.N., which was the last time this process died, which was only two weeks ago when Abbas kind of announced he was going to go to the U.N. for all these state -- recognition of state institutions, and that killed the process. I don't know how many times you have to kill a process until people say there's never really very much alive in the first place.

This is not and hasn't been a propitious time for a deal between the Israelis and Palestinians. Secretary Kerry pursued it. Nevertheless, I think, I've always thought he was wasting his time. And now I think it's really over, and he'll have to find something else to do. I guess let's give him credit for trying, but the prospects, with the entire region in such upheaval, with Iran unclear, all those other things unsettled that would affect how the Israelis and Palestinians go forward, that regional situation had to be settled before either side was going to be able to cut a deal.

BAIER: Judge, speaking of Iran, the prime minister openly worried about these talks in Geneva, essentially saying he's concerned that the U.S. is just going to essentially fold and let Iran have the switch to kind of turn on the enrichment enough to get the capacity to get a bomb.

NAPOLITANO: Well, I think his fears are absolutely legitimate and very well-grounded. And I don't know where he goes with this administration and what he can do with Secretary Kerry and how he can influence those negotiations in Geneva. What he told you today is profound. This is dreadful, dreadful news. The Israelis, not talking about the collapse of the talks, the Israelis collect fees for the Palestinians, about $100 million a year. They're not going to do that anymore. Where are they getting the $100 million from? From this United Arab group, which is now even more unified against the Israelis. This is really very, very bad news, the negotiations in Iran and the -- in Geneva with Iran and the collapse of these negotiations with the Palestinians.

BAIER: Just read through the lines as he said them there. I've heard a lot of things about the concern about those talks, that they were going to essentially fall apart.

KRAUTHAMMER: Look, I think anybody who has looked at this objectively understand that the talks are designed either to fail, spectacularly, which I think is not going to happen because it'll look bad on all sides, or to guarantee that Iran goes nuclear, because we have already essentially – we granted in advance the right of Iran to enrich uranium, which there are a dozen U.N. resolutions saying Iran has no such right. That's the essence of nonproliferation. So it undoes that. And this is with a promise of relieving sanctions at the end of this process.

BAIER: So you're saying that you don't believe President Obama when he says they will not get a nuclear weapon on my watch?

KRAUTHAMMER: There is nothing in what Obama has done, there is nothing in the negotiations that are now ongoing, and there is nothing in the fact that we have relieved the sanctions that would give anybody a reason to believe that the president has anything in his arsenal that will stop Iran from going nuclear. He can say it shouldn't happen. He can say it won't happen. But he's also said Assad has to go. He's also announced that if there were -- if Russia took the Crimean Peninsula, there would be important consequences. He says a lot of stuff, but that doesn't make it happen, and it's not going to happen here.

BAIER: Chuck, quickly, just speaking of Russia. Just a few minutes ago, Secretary of State Kerry addressed the situation and said this about moving forward with sanctions against Russia.

(BEGIN VIDEO CLIP)

JOHN KERRY, SECRETARY OF STATE: The window to change course is closing. President Putin and Russia face a choice. If Russia chooses the path of de-escalation, the international community, all of us, will welcome it. If Russia does not, the world will make sure that the costs for Russia will only grow. And as President Obama reiterated earlier today, we are ready to act.

(END VIDEO CLIP)

BAIER: Ready to act, he called it a grave mistake by Russia.

LANE: Well, look, this is the off-ramp that's always been on offer. If he can just swerve away from disaster, we'll welcome it. I don't think he cares about an off-ramp. I think he --

BAIER: Putin you mean?

LANE: Putin has been pursuing dominance of at least Eastern Ukraine and maybe the whole country in one form or another very steadily, very consistently. I don't think his behavior right now shows any -- anything but a kind of tactical deliberation about going carefully about achieving his objective. And this threat that the consequences or the costs will only grow is not specific enough to cause him to blink.

NAPOLITANO: I agree fully with Chuck. The Obama administration doesn't know what they're doing. Secretary Kerry would have been --

LANE: Did I say that?

NAPOLITANO: All right, I'm going a little bit further. Secretary Kerry would have been better saying nothing than making the empty threat that he just made.

KRAUTHAMMER: The idea that the window is closing on Russia where the whole world can see the window is closing on Ukraine, the Russians are about to activate the troops across the border. They have said there's been a grave crime committed in Ukraine. They're about to launch what looks like a takeover of the eastern part of Ukraine. And Kerry is warning the Russians at their window? I mean, he's living in a different universe. It's really quite embarrassing.

BAIER: Next up, the Nevada rancher going up against the federal government just lost a lot of his supporters.

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